It's official: Tim ha fixed Kkr fund la date of July 1st to complete the sale of NetCo to Optics BidCo for 22 billion euros. This operation aims to reduce debt and revive the ailing former telephone monopoly. The Meloni government has already given the green light, as part of a broader agreement to co-invest in the network, acquiring up to 20% of a strategic asset. Italian infrastructure fund F2i will hold a 10% stake, while Abu Dhabi's sovereign wealth fund and Canada Pension Plan will have 20% and 17,5% respectively.
Tim also has the corporate calendar has been changed for 2024: the Board of Directors will meet on 31 July to examine the preliminary data as of 30 June and on 26 September to approve the interim management report. The date of 13 November for the approval of the financial information as of 30 September 2024 remains confirmed.
In Piazza Affari, the title of the telco rises by more than 3% within an hour of the close.
Tim after the sale of the network
Currently, Tim's fixed line fiber and copper network covers almost 89% of Italian households, with fiber cables stretching over 23 million kilometers across the country. But what will happen after the sale of the network?Tim will transfer over half of its Italian employees to the new company controlled by the American fund, remaining with approximately 16 thousand employees in Italy. Furthermore, he will reduce debt by 14 billion euros and financial leverage to 1,6-1,8 times core earnings.
According to the plan of the CEO Pietro Labriola, the sale of the network will allow Tim to have greater flexibility commercial to compete in the retail services market and to explore new M&A and partnership opportunities. Tim will maintain the divisions Tim Consumer, which operates in the Internet and telephony services market for private customers and small businesses, e Tim Enterprise, which provides connectivity, cloud and cybersecurity services for large enterprises. In Brazil, the telco will continue to operate through the subsidiary Tim Brazil.
The Sparkle knot
The issue remains to be resolved Sparkle. One could arrive by the Board of Directors on July 31st new offer by Asterion and the Mef for the submarine cable company, with a valuation close to the 800 million euros expected by Tim. But still nothing: "If it had arrived we would have had to communicate it" replied the CEO.
The previous offer of 650 million euros had been deemed unsatisfactory. The sale of Sparkle would be positive, further contributing to the de-leverage of the group.
Tim also wants to sell the too residual 3% stake in Inwit, the transmission tower company, which should earn around 300 million.
Labriola: “Free to compete”
Speaking at a conference in Milan, the CEO labriola declared that the transfer of the network is irreversible: “We have obtained all the necessary authorizations”. He added that the operation will make it possible to reduce debt and eliminate bureaucratic constraints that prevented competition with other operators.
Labriola explained that “Italy is unique in the European panorama because, for historical reasons, there was only one telecommunications network. This allowed ours competitors to rent the network from Tim. As if I myself, when I sell services to my clients, purchase from myself." This situation was seen, Labriola continued, “as a presumption of being able to take advantage of a competitive advantage. And since competitors can't take advantage, you have to put in place a series of constraints. Constraints that were now anachronistic."
In Milan, for example, Tim has an 18% market share. “For this reason we have obligations to define our prices and our methods of competition. For example, we must communicate to Agcom that our prices do not allow arbitrage against competitors, who are small and weak. From 2 July the restrictions will be lifted we will become like other operators” concluded Labriola.
